George Bizos, SC, arguing on behalf of the Hani family, said the act of assassinating a high-profile leader such as the general secretary of the SA Communist Party with the intention of creating chaos in the country did not qualify for amnesty.
Derby-Lewis and Walus are applying to the for amnesty - to the TRC's amnesry committee - for the murder of Hani on April 10, 1993 on the grounds that they were acting in support of a political motive.
Bizos said the applicants had not acted on the orders of a poltical party because the Conservative Party which they supported did not have a policy of violence at the time.
He said by Derby-Lewis and Walus's own admission their motive for killing Hani had been to create a state of chaos in which a right wing government would come to power by way of a security force takeover.
Bizos said the intention had been to cause a race war in which hundreds if not thousands of people would have died.
"This is an act which certainly does not fall within the provisions of the (Promotion of National Reconciliation) Act," Bizos said.
"Can one in a country which has so many hues of colour, so many religious denomininations, so many cultures and linguistic groups, think of anything worse than trying to enduce a race war in South Africa?" he asked.
He argued that they did not meeting the requirments of the legislation and therefore should be refused amnesty.
The hearing was adjourned and committee chairman Judge Hassen Mall said the committee's decision would be made in due course.